INTERNAL HYDRO COMPLETES BUILD OUT OF LOW IMPACT HYDRO UNIT.

Internal Hydro International Inc. (OTCBB:IHDR), Tampa, Fla., has completed build out of the Energy Commander V low impact hydro energy unit. The unit will now be sent to fielding for manufacturing. With the completion of this anticipated build out phase, the company is now positioned to deliver units during the third quarter en masse through its overseas partner and domestic sources. With delivery in the third quarter of large scale production, IHDR projects delivery in the U.S. to meet the 500 unit goal in the first year of production. Each domestic unit is expected to produce between $15,000 and $17,500 annually, and in Europe, over $44,000 in revenue. The EC V hydro unit, the first of its kind to ever utilize positive displacement by cylinders set in a radial engine form, instead of traditional turbines, will now enter field operation for production within a real world use engineering environment. The company's plan of completion and start of field operations of the unit are in keeping with its plans for completion within the second quarter of 2006. The unit will be displayed on its web site in a series of photographs as it is being constructed, and will later include video of the unit running. Results of unit full out operation will follow in the web site as well.

The "slice" concept was used in production of the 12 cylinder unit. As built, each rotary 360 degree slice houses twelve 4 inch cylinders, which will be able to be stacked with other slices to provide the 30 kilowatts of standard output, with additional or less slices, each of 12 cylinders, needed or not needed based upon the flow that is present at any one location. IHDR has recently announced that it was able to plan for as little as 30 p.s.i. of pressure for production of electricity with 40 units on a single dam site by use of the slice concept. The expandability is a key that traditional turbine technology does not support.

IHDR, and its predecessor company ICI, had built four functioning prototypes utilizing the system, two of which operated under pressure for years, before the build out of the 12 cylinder radial system for production. The 12 cylinder format is the expansion of the 4 and 8 inline cylinder units of the EC IV, which was near market entry before the radial system was selected by the Board for production. The unit as being built will provide an always ready 30 kilowatts of electricity for constant use by industrial and natural flow users. The build out of the first run radial unit was unique, since so much of the machining was not off the shelf, with the technology itself not existing for many of the unique parts that make the machine; delays by machining houses were incurred but avoidable now in production.

IHDR, while currently entertaining bids and offers for domestic production, is satisfied that its European Partner, Cm2 of Italy, will be able to accomplish needed production in the short term for en mass quantities domestically if necessary. Cm2 has projected to place as many as 600 units in the first year of full production in the EU. With the new unit being of such standard production design, such units will be able to be mass produced in the final phase of production under the short term plan of IHDR. Under the joint venture agreement IHDR shall receive approximately 35% of a projected $44,000 per year revenue per unit, plus approximately $2,500 per unit produced for European use. Domestically, IHDR has projected that unit revenue will range from $15,000 to $17,500 per 30 Kw EC unit, annually.

In accordance with the contract for production and supply, Regent Machining, the supplier of the unit, has confirmed the delivery of the testable unit for IHDR and production for fielding and manufacturing test out procedures.

About Internal Hydro International, Incorporated

Internal Hydro International, Inc. is an alternative energy company that developed a clean energy power system, the Energy Commander Systems, which utilizes a patented technology using waste water, fluid or gas flow from any source where flow pressure is present, and yet wasted, to create electricity. Internal Hydro has grown into a multi-national enterprise with international contracts spanning over three continents. Internal Hydro is well positioned to gain major market share and dominate the niche of hydro energy and expansion into other renewable energy areas in the fragmented alternative energy marketplace.

For more information, visit http://www.InternalHydro.com or call 713/320-3596.